Analys från DailyFX
USD/JPY Technical Analysis: Bulls Still Haven’t Broken Resistance
Talking Points
-Japanese fiscal stimulus is anticipated to be announced Thursday night into Friday morning
-USD/JPY has overlapped July 21 low signifying the medium term bias is bullish
-Follow shifts in sentiment for clues on the near term direction of USD/JPY
The next 24-36 hours may see some volatile price swings for USD/JPY. Bank of Japan is scheduled to release their latest round of monetary statements and which may include additional measures of stimulus.
We previously wrote how the medium term bias for USD/JPY is bullish. Tuesday’s break above 105.42 creates overlap with the July 21 low. That overlap is significant because it suggests the move from 107.49 to 103.99 was a corrective consolidation and the prices may fully retrace to above 107.49 in the coming weeks.
The pattern that stands out right now is that we have a 5 wave impulsive move from July 8 to July 14 to start a new uptrend. According to Elliott Wave theory, there are two other patterns that start off a new trend with a five wave move and both of those patterns are followed by another move of similar size. Therefore, once support is formed, we can target another 600 pip move higher as that was the distance of the July 8-14 trend.
Should prices find support and move higher, the next top side level of resistance comes in near 106.72 then 107.50. Above these levels opens the door towards 111.
If prices continue to consolidate lower, consider the previous swing lows near 104.00 as support.
From a sentiment perspective, the growth in short traders has been slowing down from the recent 10 month high. The current SSI reading is +1.38 which is slightly lower than yesterday and still favors the bulls. However, if less traders become interested to the short side, then that could indicate top side potential is waning. Use the shifts in SSI to provide near term clues on price direction. See FXCM’s live trader positioning on USD/JPY here.
Suggested Reading:Bulls Aren’t Out of the Woods Yet
Are you familiar with one of the biggest mistake traders make? Find out what it is and how to overcome it here.
Interested in a quarterly outlook for USD and/or JPY? Download our quarterly forecast here.
—Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU
Follow me on Twitter at @JWagnerFXTrader .
See Jeremy’s recent articles at his Bio Page.
To receive additional articles from Jeremy via email, join Jeremy’s distribution list.
Check out the latest standings for the FXCM trading contest HERE.
What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.
Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email bysigning up here.
You can follow Paul on Twitter at@PaulRobinonFX.
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
- Tightening fundamentals – bullish inventories from DOE
- Bombs to ”ceasefire” in hours – Brent below $70
- A muted price reaction. Market looks relaxed, but it is still on edge waiting for what Iran will do
- Very relaxed at USD 75/b. Risk barometer will likely fluctuate to higher levels with Brent into the 80ies or higher coming 2-3 weeks
- Brent needs to fall to USD 58/b to make cheating unprofitable for Kazakhstan
-
Analys från DailyFX10 år ago
EUR/USD Flirts with Monthly Close Under 30 Year Trendline
-
Marknadsnyheter5 år ago
BrainCool AB (publ): erhåller bidrag (grant) om 0,9 MSEK från Vinnova för bolagets projekt inom behandling av covid-19 patienter med hög feber
-
Marknadsnyheter2 år agoUpptäck de bästa verktygen för att analysera Bitcoin!
-
Analys från DailyFX12 år ago
Japanese Yen Breakout or Fakeout? ZAR/JPY May Provide the Answer
-
Marknadsnyheter2 år agoDärför föredrar svenska spelare att spela via mobiltelefonen
-
Analys från DailyFX12 år ago
Price & Time: Key Levels to Watch in the Aftermath of NFP
-
Analys från DailyFX8 år ago
Gold Prices Falter at Resistance: Is the Bullish Run Finished?
-
Nyheter7 år agoTeknisk analys med Martin Hallström och Nils Brobacke